The news came out that the salary cap is going to be even higher than was originally expected. Instead of $92M it will be $94M. Not a huge deal (what’s a few million between friends?), but it did prompt a slew of tweets reflecting on what that money means.
So I decided to do some quick analysis of my own. Here’s what I came up with.
I removed the Celtics free agents (Evan Turner, Tyler Zeller, Jared Sullinger) and John Holland because we don’t know how much money they’ll get, and they may get it from some other team. But even if you leave Amir Johnson and Jonas Jerebko’s numbers in there, you can see that the Celtics still have over 45% of the salary cap left to spend (if they choose to do so). Seen graphically here:
A large number of other teams are going to have tons of cap space to spend, which is why we keep hearing that free agents are going to get crazy amounts of money this offseason.
So you kind of have to rethink what player values should be. This year Evan Turner was a bargain at $3.4M. In years past, he might have gotten somewhere in the range of $7-8M (so, basically Jae Crowder or Avery Bradley money). In this new economy you can expect him to sign somewhere for somewhere in the range of $10 to maybe as high as $15M.
Think of it this way. This past year Avery Bradley accounted for 10% of the team’s cap. He was probably worth more than that too.
This summer, a solid starter is going to be getting at least 10% of the cap, which translates to over $9M per year. I’ve heard it said that you can expect "solid starters" to get somewhere around $15M a year.
Stars are worth a lot more than that, but they are capped at the maximum salaries.
Per sources, latest projections for maximum salaries for 2016-17: 0-6 years = $22,200,000; 7-9 years = $26,600,000; 10+ years = $31,000,000.— Larry Coon (@LarryCoon) June 17, 2016
So you can see how some guys that are rated better than "solid starter" but not on the level of "superstar" are going to get close to max dollars, if not max dollars. It isn’t that they are worth the same as a LeBron James or Kevin Durant. It is just that the market is dictating that there’s more money to spend, and each individual contract is capped, so there’s going to be some skewing of the perception of the numbers. In other words, if there were no max contract values, LeBron and Durant would be getting a lot richer this summer than they already are.
So what does all of this mean to the Celtics? Just that they have money to spend—along with the rest of the league. It also means that all the guys on favorable contracts (Thomas, Crowder, Bradley, plus anyone on their rookie deal) is even more of a bargain going forward.
It also means that the value of draft picks is going up because when you draft a guy, you have them on their rookie contract at bargain basement prices for several years. So those trade assets are even more valuable than draft picks have been in the past.
Just food for thought as we enter a very interesting free-agency period (and a draft that could be impacted significantly by this new economy).